It’s Mobile Banking Jim, But Not As We Know It

Considering that mobile banking apps are one of the most popular ways people access banking services these days, they seem to be stuck in a bit of a time warp.

Even the simplest of transactions (like paying bills) means repeating a process that, a little while ago, a friendly cashier would have completed. And, what with customers having to dream up mind-bending passwords (*æ♯Ħ@Ŧ*Ø!Ÿ!) and answer brain-scouring security questions like “which is your favorite Beatles’ album?”, “what was your first girlfriend’s middle name?”, and “where were you conceived?”… c’mon! Seriously?

But, what if…?

Imagine, Kirk is buying his granddaughter a toy communicator. He taps his phone against the retailer’s payment terminal. Behind the scenes, the company that holds his secure online identity sends an invitation to service providers to bid for making the payment.

Bids are returned to his online identity and the most favorable suitor, selected. Kirk’s online identity transfers his bank details to allow the payment to be processed. His phone receives a push message requesting approval, and a biometric fingerprint scan authorizes payment. The completed transaction is sent to the retailer and a receipt, automatically loaded into his spending profile by his bank.

And all this happens in the blink of an eye.

Or maybe it’s time to renew his car insurance, and he’s looking for a quote. All the data is transferred from his online identity and a real-time, insurance-provider bid process begins. All Kirk has to do is pick the quote that best matches his cost and cover requirements.

So, are these just Star Trek scenarios, or are they close-ish encounters?

Well, pieces are starting to fall in place. In the UK, the GOV.UK Verify initiative is working with the Open Identity Exchange to define standards for online-identity management. The initial providers have been appointed and are helping industries like retail, utilities, telco, health, and finance, to define compelling customer use cases.

By 2018, there will be 8.2 billion handheld (or personal) mobile-ready devices, and 2 billion machine-to-machine connections (e.g. GPS in cars, asset-tracking systems, medical applications, and so on)*. This is already triggering an inventing frenzy as new market entrants try to bring their ideas to fruition. It’s all set to revolutionize the way that consumers interact with service providers, and reduce standalone mobile banking applications to a faint blip on the banking tricorder.

That said, customers need to control their own data and understand what they’re giving away when it’s used to buy a service or product. But, certainly, with the new levels of detailed information available – be that domestic energy-usage patterns, driving-behavior telematics, or current state of health – they’ll be able to make better-informed decisions.

The banking community has a golden opportunity to restore some of the trust that’s been eroded over the years. Where do they begin? Well, how about creating data-driven experiences that actually make mobile financial life simpler, quicker, and cheaper. How about that?